The recovery should arrive in November, but before finding a more serene landing place, the Italian and European boats must overcome the crisis of the Spanish banks that is shaking the markets. Italy in particular still has a lot to do, to free up resources, contain the tax burden and rebalance the deficit/GDP ratio, first of all liberalisations, really putting a hand in public affairs, reducing municipalities and abolishing provinces. This is the analysis of Giacomo Vaciago, one of the most famous economists, a professor at the Catholic University of Milan and a great expert on monetary policy.
FIRST online - Professor they thought they were safe but we're back in the storm, why?
I vaciago – Because six months are not enough to get out of trouble. Already a year ago I wrote that the wise sailor, when he blows bad weather, strengthens the moorings. On the other hand, for years we have continued to say that we have no problems, that the others were in trouble and we weren't. Now let's pay the bill, because if he's doing bad things in Greece and Spain, he's doing bad things here too, which he happens to be right in the middle of. In Italy we don't have banks on the verge of bankruptcy and we don't have deficits hidden like dust under the carpet, but we have a deficit/GDP ratio of 120% and no matter how much we tighten our belts, if GDP doesn't pick up again, investors won't put money into our debt. How to blame them? How do you pay your mortgage if you are out of work? There is no one who speculates, they just don't invest. The markets are also vindictive, trusted peripheral Europe believing it would conform to German standards and now they no longer believe it.
FIRST online – European Commission President José Manuel Barroso argues that if Greece does not respect the agreements, it must leave the euro. Could an event like this further overwhelm us?
I wander - No, Greece is no longer a real problem. We are all already paying for the eventual Greek bankruptcy and its exit from the euro. Of course it is important that he leaves without slamming the door. I even wonder why it joined the euro, two bills in pencil were enough to understand that it wasn't worth it. But when the euro was born it was a kind of party and everyone wanted an invitation to participate. To stay in a club like this, however, you have to be willing to give something and what has Greece given? Did you think you could access German rates, without ever giving anything back? It could have become the Florida of Europe. but it has never taken this direction either. Our case is different: trade with Germany is rich in imports, but also in exports. The Germans love food, Italian fashion and even our cars: it is no coincidence that Audi bought Lamborghini and Ducati. The Germans are making investments in northern Italy, unfortunately they are not going to Puglia or Sicily and this is our problem.
FIRST online – In short, only those who are liked by the Germans are saved?
I wander - Those who serve the emerging countries together with the Germans are saved. Germany really started off again when it became the leading supplier of the Bric and we have to follow suit. Small Italian businesses must enter this supply chain.
FIRST online – Is the Spanish banking crisis the real problem these days?
I vaciago – Certainly. The real estate bubble first and now the banking crisis are definitely bringing malaria in our direction too. Zapatero was worried about marrying homosexuals, but, with all the respect I have for any type of union, the priorities were different. The way out for Spain is nationalization, the Bad Bank. After all, what did the Americans do? Banks cannot be bankrupt.
FIRST online – Does Hollande bring a fresh breath to Europe? Maybe it eases the way for Eurobonds, Golde Rule or Project Bonds…
I wander – God willing we got rid of the other one, Nicolas Sarkozy, who was kneeling in front of Angela. Holland he still has to put the key in the Elysium, when he gets familiar with the house he can stick his nose out and we'll see what he does. He is certainly closer to Monti than Sarkozy was. The Germans do not want the excessive debt of the states to become a federal debt, because it would be like a pyramid that stands on top, it would struggle to stand up. Instead, Project Bonds are feasible and can be used to finance military ships and aircraft, favoring the creation of a common army. Furthermore, they can be destined for infrastructures useful to Europe, from telecommunications, to broadband, to ports, such as that of Trieste, stopped due to disputes between the mayor and the president of the province, as if it were a problem of Friuli and not an infrastructure relevant for everyone, including Austria and Germany. A revival of the economy can only come from a recovery in investment and, given that we have no money, project bonds seem like a good solution to me.
FIRST online – Italy already seems to have exhausted the thrust of the Monti effect. How can it at least find the resources to reduce taxes on businesses and labour?
I vaciago – There are still many things to do, we have only been waiting for the reform of the labor market for twenty years. What about liberalisations? Do we think we've solved something by picking on the taxi drivers and notaries? We have to touch the real strongholds, the public monopolies and the structures of local authorities, where the mayors put this and that, instead of thinking about better administering their cities. We still have 8000 municipalities and they must become a thousand; we have 110 provinces and they must become zero. Is the concept clear? I expect Bondi to really put his hand in public administration. I would like to save a few euros next year and with me many Italians who are not spending because they are afraid. We still don't know what we will pay for Imu, is it possible to live in this uncertainty?
FIRSTonline – Is the future gray?
I wander – It's uncertain. The recovery expected in June has been postponed by a few months. I think however that, barring new catastrophes, in November we will see some positive signs, but the agenda of things to do is very busy.
